BOTSWANA, a southern African nation once heavily reliant on diamond revenues, is now focused on diversifying its economy to ensure sustained growth and prosperity. The country’s journey from diamond discovery to economic independence has been marked by strategic investments and visionary leadership.
Since the discovery of diamonds in 1967 and the subsequent operation of the Orapa diamond mine in 1971, Botswana experienced significant economic transformation. The share of agriculture declined while diamond revenues surged, propelling Botswana’s GDP growth to an average annual rate of 9 percent from 1966 to 2005. By 2006, Botswana transitioned from one of the poorest countries at independence to an upper-middle-income nation, with a per capita GDP of $7,000.
Kebapetse Lotshwao, a senior lecturer at the University of Botswana, emphasised the critical role of diamonds in Botswana’s economic journey: ‘The discovery, mining, and export of diamonds are essential for Botswana to achieve economic independence.’ Lotshwao also credited visionary leadership for ensuring that diamond proceeds benefit ordinary citizens.
The government established the 50/50 joint venture Debswana with De Beers in 1969, solidifying Botswana’s position in the diamond industry. Under this partnership, Debswana sells 75 percent of its raw diamond production to De Beers, with the remaining output distributed to the state-owned Okavango Diamond Company.
Revenue from the booming diamond industry has been instrumental in funding social welfare programs, including free education up to secondary level and healthcare services. However, recognising the need for economic diversification, Botswana has embarked on initiatives to reduce dependence on mining.
Finance Minister Peggy Serame outlined priorities for non-mining industries’ growth in the second Transitional National Development Plan, emphasising youth employment, fiscal sustainability, economic diversification, and livelihood enhancement. Efforts include a recent $38.5 million funding boost for small businesses, benefiting at least 200,000 small, micro, and medium-sized enterprises (SMMEs).
Botswana’s informal SMME sector, though modest in GDP contribution, plays a vital role in employment and livelihoods, according to Statistics Botswana. Vice President Slumber Tsogwane emphasized the sector’s significance: ‘The informal SMMEs sector has been a real alternative for employment and improved livelihoods for many citizens.’
As Botswana advances its economic diversification agenda, balancing growth between mineral and non-mineral sectors remains a key priority. Tsogwane expressed optimism: ‘If both mineral and non-mineral sectors can grow, Botswana will truly become a prosperous nation.’ The country’s strategic shift underscores a broader trend in African economic development, setting an example for sustainable growth beyond resource extraction.